Saturday 2017-12-16

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SERVICES TRADE NOT FULLY UTILISED IN THE COUNTRY

By Majaha Nkonyane | 2017-12-07

Despite services being important for economic growth and development, Swaziland, along with other African, Caribbean and Pacific (ACP) countries, is yet to harness their full potential.

 European Union (EU) Embassy Economist Nomfundo Dlamini, who was representing Ambassador Esmerelda Hernandez Aragones, said the ACP countries (the group which was created by the Georgetown Agreement in 1975 wherein the country is categorised), had not fully exploited their potential in the area of services.

“This is seen in the inherent weakness arising from low levels of development; high economic vulnerability due to external economic and natural shocks, as well as weak institutional, regulatory and productive structures.”

She said given such inherent constraints, promoting economic growth and development, particularly in service delivery remained a formidable challenge.

This she said during the sensitisation seminar for a project to develop a Trade in Services Strategy which was held at the Royal Swazi Sun yesterday.

Dlamini stated that trade in services can make a significant contribution to increasing sustainable growth and creating jobs; “More than 30 million jobs in Europe depend on exports outside the EU with 90 per cent of future global growth predicted to happen outside Europe’s borders. Hence, trade is a vehicle for growth and a key priority for the EU.”

Concerning the role of services as inputs into other sectors of a national economy, she said they were not only important as they contributed to manufacturing growth and productivity as she emphasised that a positive relationship had been established between the level of income per capita and the intensity of use of services in manufacturing industries.

The failure to fully exploit the potential services is said to be seen in the inherent weaknesses arising from low levels of development, high economic vulnerability due to external economic and natural shocks, as well as weak institutional, regulatory and productive structures.

Revealing the proportional worth of services exports produced by ACP countries when compared to other developing nations, she said they accounted for only 3 per cent.

This, she said, implied other services exporters were growing faster than ACP states, which is a matter of concern.

“This dismal performance in services trade calls for urgent measures to enable ACP states to increase their participation in world trade in services.”  She further pledged the EU’s support for ACP states in efforts to strengthen capacity in supply of services.

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